Why The Restaurant Industry Struggles

We try to help restaurants succeed.

But some of them just don't get it.

The latest results from the National Restaurant Association’s Restaurant Performance Index (R.P.I.) tell of continuing contraction in the foodservice market.

Yet our calls to restaurant brands often get a polite "we're not interested."

Some chains can't leverage their brands to retail because of ill-thought-out franchise agreements limiting them from rolling out retail versions of menu items. The restaurant industry likes franchising because it spreads the risk out to others, and brings in large amounts of revenue without much outlay.

And franchisees usually think the chains just want to bleed them white. So any efforts to look at alternatives like licensing are met with skepticism. Despite sales figures that consistently rise at restaurants with robust retail presences, franchisees I've talked with are convinced consumers would rather buy food in the supermarket rather than eat out.

If so, it must be a reflection on their poor service, dirty facilities or lack of imagination.

But it doesn't work that way. Consumers are only interested in meal solutions. We need to change our thinking away from "market share" to "share of stomach."

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